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FINEX WEEK

  1. The KASB review
  2. Finex week

Updated on Feb 07, 2000

Short term rates were caught in a bearish spell this week. The heavy deluge of liquidity by way of a T-bill maturity of Rs. 8.90 bln on the 2nd of Feb only made matters worse for banks running long. The overnight quote which was initially hovering within 4.00% to 5.00% fell to 1.50% on Thursday (2nd of Feb) before recovering slightly towards the week's close on Friday. Activity in term repos was moderate to heavy this week. The two main tenors which gained the most interest were the 1 month period and the 6 month tenor. System based trading accounted for decent volumes being dealt in the 1 month tenor, from early next week. Certain banks running short opted to cover their positions in the 1 month tenor in the band of 7.40% to 7.70%, based on apprehensions of a possible 'non-injection' in the scheduled OMO. But this buoyancy in the 1 month quote failed to have any impact on the long term repo market. Moderate volumes continued to be traded in the 5 to 6 month tenor in the region of 8.00%, hence maintaining status quo. The complete rejection of the latest OMO this week led to a forecast of the market turning bullish next week as there is an OMO injection maturity of Rs. 8.95 bln falling on the 7th of Feb. But these fears were short lived as the SBP towards the week's close announced a special two-way OMO for Monday (7th of Feb); clearly hinting towards a potential net injection of funds.

The sudden announcement of a special two-way OMO for next week makes a net injection appear almost a certainty. Offers of 1 month funds in the wake of this announcement took a plunge and were easily available at 7.25%. Bidding for 1 month money in the next OMO should be relatively decent. Meanwhile, the medium to long term repo market should also continue to tread with a bearish bias during next week.

YIELD PROFILE

FEDERAL INVESTMENT BONDS

1 Year 08.75 09.50 14.10%
2 Year 09.50 10.25 14.25%
3 Year 10.00 11.00 15.00%
4 Year 10.25 11.50 15.25%
5 Year 10.75 11.75 15.75%
10 Year 11.25 12.00 16.75%

 


 

AUCTIONS
Bid Date Instrument Result Settlement
Jan 26 T-BILL Jan 26 Jan 27
Target Amount Bid
Amount
Accepted Amount
Rs. 03.4 Bln.

Rs.17.700 Bln

Rs. 2.850 Bln

 


 

MATURITIES

Instrument

Date

Amount

T-Bill 02 Feb 8,885 Mln
T-Bill 10 Feb 100 Mln
T-Bill 15 Feb 5,300 Mln
T-Bill 24 Feb 25 Mln
T-Bill 26 Feb 3,525 Mln

 


 

REPO RATES

Overnight 03.50 04.50 16.45
1 Week 06.75 05.50 13.25
1 Month 07.50 07.50 11.65
3 Month 07.70 07.80 12.60
6 Month 07.90 08.00 13.40
1 Year 08.75 09.50 N. A.

 


 

TREASURY BILL RATES
1 Month 07.20 07.10 12.50
2 Month 07.50 07.40 12.75
3 Month 07.70 07.65 13.25
4 Month 07.80 07.75 13.30
5 Month 07.90 07.95 13.35